[sbinews] RBI Asks Banks To Comply With Credit Exposure Norms (Financial Express)
- From: "Rajendra S. Pai" <rspai9@xxxxxxxxx>
- To: sbinews@xxxxxxxxxxxxx
- Date: Tue, 22 Jun 2004 20:13:48 -0700 (PDT)
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RBI Asks Banks To Comply With Credit Exposure Norms
(Financial Express)
OUR BANKING BUREAU
Posted online: Wednesday, June 23, 2004 at 0000 hours
IST
MUMBAI, JUNE 22: The Reserve Bank of India (RBI) has
asked banks to strictly comply with the credit
exposure ceiling of 15 per cent and 40 per cent of
capital funds to single and group borrower,
respectively. The banks were also asked to comply with
an additional limit of 5 per cent and 10 per cent,
respectively, for exposure to infrastructure, either
by increasing capital funds or reducing exposures, by
March 31, 2005.
Earlier, banks with difficulty in complying with the
exposure ceiling could get RBI approvals on a
case-by-case basis. The RBI had said in its annual
policy statement for 2004-2005 that the practice of
giving case-by-case approval will be discontinued, in
the light of the liberalised access of borrowers to
external commercial borrowings (ECBs) and their
ability to raise resources through capital/debt
market.
Banks may, in exceptional circumstances, with the
approval of their boards, consider enhancement of the
exposure to a borrower up to a further 5 per cent of
capital funds subject to the borrower consenting to
making appropriate disclosure in their annual reports,
RBI said in a notification on Tuesday.
The exposures where principal and interest are fully
guaranteed by the government may be excluded while
computing the extent of exposures. The bank should
make appropriate disclosures in the ?notes on account?
to the annual financial statements in respect of the
exposures where the bank had exceeded the prudential
exposure limits during the year, RBI added.
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